Paths to Realizing Farmers' Share in Value-Added Benefits
Enabling farmers to obtain industrial value-added benefits is essentially a win-win for different stakeholders, and it is necessary to establish effective benefit-linking models and strengthen relevant policy support.
In a poor township in Yunnan, villagers have lived for generations deep in the mountains with little contact with the outside world. Combined with fragmented plots of land, crop yields are not high, and life is very hard; many young men cannot even find wives. Because the village has many tea trees, in order to change the predicament of "living in poverty while guarding treasure," the local area targeted tea processing and brought in processing enterprises. But the relationship between the enterprises and farmers remained merely one of buying and selling. When the market is bad, farmers' income looks low, and the effect on stable income growth is not ideal.
Similarly hoping to drive farmers to prosperity through developing agricultural product processing, in a major wheat-producing county in the north, leading enterprises signed contract orders with farmers, purchasing wheat that met quality standards at about 10% above the market price. This both solved the difficulty farmers had in selling grain and allowed high quality to fetch a high price.
In doing a good job in work related to agriculture, rural areas, and farmers, an unavoidable topic is how to promote farmers' income growth. Today, the flow of resource factors between urban and rural areas is accelerating, and the development of the agricultural industry is ushering in opportunities. Many places are vigorously bringing in leading enterprises and cultivating new types of business entities, hoping to enhance industrial value-added benefits and promote farmers' income growth by expanding the scale of operations and extending the industrial chain. But there is always a certain gap between the beautiful blueprint and reality. When interviewing in some rural areas, the author found that many enterprises or cooperatives are not closely linked with farmers' interests. The industry has grown bigger and profits have increased, but farmers have gained little. To a certain extent, the value added at the high end of the agricultural industrial chain has not brought more returns to farmers at the low end.
There are many reasons for this situation. From the perspective of new types of business entities, many agricultural product processing enterprises are still small in scale and have not yet escaped the family workshop-style production and operation model; their technical and equipment levels are relatively poor, the processing level still remains at the primary stage, and profitability is still very limited; the industrial processing chain is relatively short, enterprise operations cannot form a cluster effect, and their driving force for farming households is not strong. From the perspective of farmers, most may still be satisfied with quickly selling off agricultural products and getting a decent price, lacking the awareness and motivation to participate at a higher level in the industrial chain.
To let farmers share in value-added benefits, it is necessary to strengthen the driving role of new types of agricultural business entities, with leading enterprises as the mainstay. It should be noted that many enterprises lack subjective motivation to drive farmers' income growth, and even regard driving farmers' income growth as a losing proposition. In fact, as two important links in the industrial chain, agricultural enterprises and farmers are a natural community of interests. Without farmers providing stable-quality raw materials and careful production and management, enterprises' desire to obtain value-added profits would be water without a source. Therefore, on the one hand, it is necessary to establish effective benefit-linking models to provide institutional guarantees for farmers to share in industrial value-added benefits. On the other hand, it is also necessary to strengthen policy support for new types of business entities and link it to the intensity of enterprises' efforts to drive farming households, so that enterprises willing to support and help agriculture receive more tangible benefits.
To share in industrial value-added benefits, it is also necessary to respect farmers' principal position and give play to their creativity. Today, many skilled farmers have also thrown themselves into the tide of large-scale and industrialized agricultural operations, exploring various benefit-linking models such as land trusteeship and shareholding, driving farmers to increase income. They have closer emotional ties with rural areas and farmers, and are willing to become leaders who help farmers get rich. In the future, the training of these new types of farmers should be increased, and their driving role should be stimulated.
To realize farmers' sharing in value-added benefits, it should also be placed in the macro framework of advancing structural reform of the agricultural supply side. Finding industries with higher comparative benefits is the key to cracking the problem. It is necessary to be market-oriented, base oneself on one's own characteristics, and achieve precise alignment between effective supply and demand. When industrial benefits are good, income growth at all links in the chain can be guaranteed.
In short, if China is to be prosperous, farmers must be prosperous. At present, household operating income still occupies an important position in the composition of farmers' income. It is necessary to let farmers enjoy the fruits of industrial value-added benefits and live good lives with bulging wallets through innovating models for sharing value-added benefits.